Oren Cass’s essay demonstrates how the advantages of industrial policy, apparent to some of the founders of economics and foundational to the success of the United States, were carefully airbrushed out by advocates of free trade in the 20th century.
Oren Cass takes on the entrenched belief held by the U.S. economics profession that countries should always pursue a policy of free trade. He argues that Smith and Ricardo have been misunderstood for generations because their key assumptions around capital mobility were omitted as the arguments were passed down.
Economic theorists treat globalization as the free market’s natural end state. But trade practitioners know that the opposite is true—that efforts at stitching together the world’s economies are among the messiest sausage-making exercises in policymaking.
The debate over free trade versus protectionism has been around for hundreds of years, with a level of political prominence that has varied over time. After a relatively quiet period in the post-war era, the modern debate over trade and globalization’s rules and institutions has grown quite contentious.
The first part of Mr. Cass’s argument is that the entire economics profession has either misread or misinterpreted a sentence in Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations, and that it has built the case for free trade from that alleged misreading or misrepresentation. This is simply and fundamentally not true.
Commentators and policy analysts respond to our analysis of globalization and proposals to restore balance to the American economy
Policymakers can act on several fronts: market access and investment rules to govern the flow of goods and capital; sovereign actions taken in relation to global institutions; and immigration policy that affects labor market composition.
Despite the priority traditionally given to the free flow of capital, many now argue that Beijing should be the exception, writes American Compass executive director Oren Cass.
Each argument for globalization appeared sensible on its own terms, but each was built upon faulty premises or failed in the final analysis to support the ultimate agenda.
The question is not will we manage our economy’s interaction with the global market, but how, writes American Compass executive director Oren Cass.
The era of globalization has coincided closely with the onset of precisely those problems that a clear-eyed analyst might have predicted and delivered outcomes contrary to the ones its ideologues envisioned.
PRESS RELEASE—New American Compass report on the failed experiment of globalization and an online quiz that exposes the bipartisan Uniparty’s witless case for globalization
The problem was that the powerful and wealthy saw no problem. They benefited from closing American factories and moving jobs abroad. They benefited from lower wages. This was their agenda from the start.
How to Right the Wrongs of Globalization
Mutual dependence between capital and labor, not mere “economic freedom,” is what Adam Smith so ably described. Globalization destroys it.
Oren Cass joins David Bahnsen to discuss globalization, market orthodoxy, and much more.
Pete Coy discusses the debate over free trade, highlighting Oren Cass’s rebuttal of Glenn Hubbard’s recent book.
We have adapted Senator Rubio’s speech as an essay, which we are pleased to present as this week’s Compass Point: Trading It All Away.
Adapted from remarks delivered by Senator Marco Rubio on the 20th anniversary of China’s ascension to the WTO.
Henry Olsen discusses Sen. Rubio’s remarks at American Compass’s inaugural Henry Clay Lecture in Political Economy.
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